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Case study
Publication date: 27 May 2022

George L. De Feis and Donald Grunewald

Later in the discussion, the options for long run strategy in dealing with a possible takeover offer and other strategic options can be discussed by the class. Lack of familiarity…

Abstract

Theoretical basis

Later in the discussion, the options for long run strategy in dealing with a possible takeover offer and other strategic options can be discussed by the class. Lack of familiarity by students with the role of the outside potential acquirer of the camp (in this case, a hotel chain) and the lack of familiarity with the role of an investor who is a family investor, who may wish to sell stock and use the proceeds for another purpose, or a small investor who invests because he or she uses the camp and takes advantage of the stockholder’s discount will probably preclude role playing, except in executive MBA classes where students have sufficient experience in possible takeover situations or in investment management, Emphasis should probably be placed on discussing the major issues, such as social and cultural issues and on marketing and public relations issues and on financial issues, including the options available in the event of a possible takeover effort. All of these issues are impacted fully by the COVID-19 pandemic.

Research methodology

Instructors will need to play an active role in teaching this case. It is recommended that the instructor give a short lecture or discussion at the beginning as to how a camp such as Camp Teddy functions. The authors recommend that the instructor then begin the case discussion by asking students questions about such issues as social and cultural issues and marketing and public relations issues.

Case overview/synopsis

Camp Teddy is a seasonal camp for families in rural Connecticut adjacent to New York City and suburbs in New York and Connecticut. It is technically a for-profit organization but operates more like a nonprofit organization because many of the campers own shares and have used the camp sometimes for several generations. The camp has traditions that are liked by many of the shareholders and campers. Although net income has increased in the past year, there does not seem to be enough funds to support necessary capital expenditures to improve facilities for the future. The largest stockholder has recently died. His immediate heirs’ control 300 of the 1,000 shares and other family members control 400 shares with the remaining 300 shares in the hands of small shareholders, many of whom use the camp each summer. A large hotel chain is interested in possibly acquiring the camp through a buyout or perhaps a hostile takeover, with a potential large gain to shareholders. The board of directors must consider a number of issues to insure good occupancy of the camp in the future and must decide what to do about a potential takeover attempt.

Complexity academic level

This case can be used in several courses, including investment management, hospitality management, corporate finance and business strategy. There are ethical and societal issues in the case, so that the case might also be used in courses looking at business, environment or business ethics. The case is best used at the graduate level, but it might be suitable for some advanced undergraduate courses.

Details

The CASE Journal, vol. 18 no. 5
Type: Case Study
ISSN:

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Case study
Publication date: 20 January 2017

Craig Furfine, Sara Lo and Daniel Kamerling

Aurelia Dimas had been sent to investigate the various properties being offered by the State of California in the form of a sale-leaseback agreement. The opportunity was perfect…

Abstract

Aurelia Dimas had been sent to investigate the various properties being offered by the State of California in the form of a sale-leaseback agreement. The opportunity was perfect for her firm, Orrington Financial Partners, which had recently expanded its fixed-income portfolio to include real estate. The wide range of offerings in the Golden State Portfolio provided both diversification and stability over a period of decades. She had spent the last week walking the halls of each and every building to see the offering first hand. Now the task of valuing the portfolio rested on her shoulders.

By reading and analyzing this case, students will be exposed to real estate valuation and understand the issues with a sale-leaseback investment. The objectives are obtained by requiring students to justify how and why they make adjustments to the cash flow forecasts provided to them by a real estate advisory firm, explain their methodology for arriving at a specific value for a piece (or a portfolio) of commercial property, and debate the pros and cons of a sale-leaseback structure.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

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